Oil imports from Iran may be reduced as U.S. mulls waiver

  1. Indian officials has been working closely with the United States to ensure that India gets a better deal on (a)the extension of the Iran oil sanctions waiver and (b)decision on withdrawing India’s preferential Generalised System of Preferences(GSP) status.
  2. During discussion with US officials,it was indicated that decision on the GSP withdrawal could be deferred until elections.However,discussions on the Iran oil sanctions waiver could be extended,with India allowed a lower quantity of oil imports from Iran.
  3. The US had granted exemptions to (a)China (b)India (c)Italy (d)Greece (e)Japan (f)South Korea (g)Taiwan and (h)Turkey from sanctions on Iran.The exemptions were meant to last six months and were due to expire in March,2019.
  4. However,the US had not ended the sanctions waiver provided to eight countries.It had allowed them to continue purchasing Iranian crude oil as these countries had showed significant reduction in oil purchase from Iran after the United States had re-imposed sanctions.
  5. Further,US had earlier announced its decision to terminate India’s designation as a beneficiary of its Generalized System of Preferences (GSP).Generalized System of Preferences (GSP) is a preferential tariff system extended by developed countries to developing countries which allows zero tariff imports from developing countries.The primary objective of GSP is to give development support to poor countries by promoting exports from them into the developed countries.
  6. The US had taken this decision due to concerns over a range of issues like (a) India’s new rules on e-commerce that affected firms such as Amazon and Walmart (b) Data localisation rules which forced foreign companies to store their data locally (c)Price controls on medical devices(Cardiac stents) (d)Tariff on ICT products such as smart watches and high end mobile phones (e)Lack of greater market access for the US dairy industry and (f) Trade imbalance between India and the US.